TCN Blog 2016 Top Story #3: International Shopping Spree

Because of their 2015 regular season success (100 wins), the St. Louis Cardinals received the smallest international bonus pool allocation of all Major League Baseball clubs for the 2016-2017 signing season, at just over $2 million.

However, due to favorable external conditions, the Cardinals decided to blow that budget out of the water, signing more players and spending at least eight times more money – including the associated MLB penalties.

Contributing factors to making this decision included a number of deep pocketed clubs held back from high spending on individual players due to prior year over-spending, a widening Cuban pipeline and unknowns prior to the new Collective Bargaining Agreement that went into place at the start of this month.

To date in the current period which began on July 2, the Cardinals have signed 25 international players, with more potentially under consideration. Sources including Baseball America and MLB.com have disclosed signing bonuses for just 10 of the 25.

Of those 10, four have received more than $1 million, three of whom are Cubans. The other six picked up between $100,000 and $600,000 each in signing bonuses. The list is topped by outfielder Jonatan Machado, the highest-bonused international signee in team history at $2.35 million.

To help put that into perspective, Machado alone received more than the Cardinals’ entire international signing budget for the year. (In the photo, he is smiling in the foreground with another new millionaire outfielder and fellow Cuban, Randy Arozarena, in the cage in the background.)

Five of the 25 were signed to 2016 contracts and began play in the Dominican Summer League. The playing contracts of the other 20 will go into effect in 2017.

Here they are:

Signed – bonus reported (10)

Pos

Ctry

Age

Bonus

Year

Jonatan Machado

OF

Cuba

17

$2,350,000

2016

Johan Oviedo

RHP

Cuba

18

$1,900,000

2016

Victor Garcia

OF

Ven

16

$1,500,000

Randy Arozarena

OF

Cuba

21

$1,250,000

Carlos Soler

OF

DR

16

$600,000

Franklin Soto

IF

DR

16

$550,000

Carlos Soto

C

Mex

17

$400,000

2016

Roy Garcia

RHP

DR

15

$200,000

Luis Montano

OF

DR

16

$200,000

Alexander Samuel

OF

DR

16

$100,000

$9,050,000

Signed – bonus not reported (15)

Pos

Ctry

Age

Bonus

Year

Rodard Avelino

RHP

DR

17

Allinson Benitez

RHP

Ven

16

Diomedes Del Rio

OF

Ven

18

2016

Joyser Garcia

C

Ven

16

Ivan Herrera

C

Pan

16

Erik Pena

SS

Ven

16

Yowelty Rosario

SS

DR

16

Enmanuel Solano

RHP

DR

17

2016

Larimel Soriano

RHP

DR

16

Cristoffer Zapata

LHP

DR

17

Leonardo Taveras

RHP

DR

17

Freddy De Jesus

1B

DR

16

Pablo Gomez

SS

DR

17

Nelson Prada

LHP

Ven

16

Hector Soto

RHP

Mex

17

The first table is ordered by signing bonus amounts. The second is roughly sequenced by signing date, with the most recent, Mexican right-handed pitcher Hector Soto, announced just one week ago.

Now, let’s roll up the numbers – for those players whose bonuses have been disclosed. As a result of the exclusion of 15 players, remember that these numbers are low, not high, when considering the team’s total spend on international players this period.

Signed players (known bonuses)

$9,050,000

Pool allocation

$2,027,300

Pct over pool

Overage signed players (known)

$7,022,700

246.4%

$ penalty

Signing penalty

Penalty for signed (> 15% above pool)

$7,022,700

100% tax

No player over $300K in 2017-18 and 2018-19

Pct pool

Signing penalty

Total cost signed players (known)

$16,072,700

792.8%

No player over $300K in 2017-18 and 2018-19

As noted, the Cardinals have committed over $9 million of player signing bonuses against their budget allocation of just over $2 million.

The reason for this is that the system was set up with low bars. The highest penalty rate possible under the then-current rules is incurred at 15 percent overspend.

As the table above indicates, the Cardinals have exceeded their allocation by more than $7 million. The club will owe that same amount to MLB, a 100 percent financial tax. In addition, St. Louis will be prohibited to sign any individual players for more than $300,000 each over both of the next two 12-month signing periods.

This is very important to understand. While the Cardinals have been fattening up their minor league system during this signing period, they will face an international famine in the 2017-2018 and 2018-2019 July 2nd classes. So it is especially crucial they get the right players this time around.

When all is considered, to secure the services of just 10 of these 25 young men, the Cardinals have spent over $16 million, or about 800 percent of their pool allocation.

To put that total into perspective, it is over 50 percent more than the organization spent on this June’s entire First-Year Player Draft. It is more than double what the Cardinals are paying for four years of Aledmys Diaz’ services.

Plus, the signing year is far from over. The Cards could decide to keep spending.

But even if not, this is an unprecedented player haul for the Cardinals organization, the likes of which we will not see again under the far more restrictive set of terms enacted in the new CBA, which explicitly prohibit over spending.